Paying the right price

A mark-to-market assessment reassures a credit services client that a contract is fair.

Opportunity

An important part of managing a multi-year outsourcing agreement is ensuring that prices stay competitive to current market rates. Our credit services client was three years into a five-year agreement for end-user computing and service desk support when it came to us for a market price range analysis for its outsourced services.

Imagining IT Differently

ISG found that the supplier’s rates were generally within market ranges, though there were some big regional variances. While a re-bid might result in “re-weighting” of some costs across regions, overall savings were likely to be minimal. ISG also flagged non-market-standard methodology that was not well managed and a contract that was poorly constructed and silent on many standard topics.

Future Made Possible

Confidence that existing pricing was not out of market

Validated evolving trends in the marketplace

Specified services the client should expect or request in the future, and the key providers for these services in the marketplace

Understanding of typical contract clauses and important clauses for a renegotiation or re-bid

Knowledge of typical market service-level methodology and the need to properly manage the process overall